News & Analysis

PODCAST: ESG-linked fund finance – sustainability step-change or window-dressing?

Editors from across the PEI stable jump on Zoom to swap thoughts on a growing trend in private markets: linking the cost of fund-level credit facilities to ESG performance.

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KKR, Eurazeo, EQT, Carlyle, Quadria Capital: these private fund firms are all early adopters in an emerging private markets trend. Each firm has secured lines of credit for which the cost is linked to environment, social or governance metrics. Better “non-financial” performance is translated into financial reward in the form of less expensive bridge facilities.

Managers putting their money where their ESG mouth is? What’s not to like? Well, journalists are naturally sceptical beasts, and the PEI editors are no exception. In this episode of the Spotlight podcast, they discuss terms, transparency and whether a credit facility is really the most effective vessel for the ESG carrot and stick.